Efficiency, Risk, and Fintech as Indonesian Bank Profitability Drivers

Authors

  • Himmatul Kholidah Universitas Airlangga
    Indonesia
  • Evita Nur Haliza Universitas Airlangga
    Indonesia
  • Norzahidah Binti Yacob Universiti Teknologi MARA Cawangan Melaka
    Malaysia
  • Mochammad Nurul University of Pécs
    Hungary
  • Muhammad Raisa Haqqiquddin Rokhmatulloh Universitas Airlangga
    Indonesia
  • Hanifiyah Yuliatul Hijriah Universitas Airlangga
    Indonesia
  • Hanif Fadhlillah Universitas Airlangga
    Indonesia

DOI:

https://doi.org/10.23917/reaksi.v11i2.18987

Keywords:

Bank Profitability, Bank efficiency, Fintech lending, Risk-adjusted profitability, System GMM

Abstract

Bank profitability is essential to financial intermediation and financial system stability, particularly in emerging economies undergoing rapid digital transformation. This study examines the associations of bank-specific factors, market structure, macroeconomic conditions, and fintech lending with the profitability of ten major Indonesian banks from 2018 to 2024. Annual panel data are analyzed using the one-step System Generalized Method of Moments. Bank profitability is measured using Return on Average Assets, Return on Average Equity, Net Interest Margin, Risk-Adjusted Return on Average Assets, and Risk-Adjusted Return on Average Equity. The findings indicate that the cost-to-income ratio is negatively associated with all five profitability measures, highlighting the importance of management efficiency. Credit risk, liquidity, income diversification, market concentration, inflation, and long-term interest rates exhibit different associations across conventional and risk-adjusted measures. Fintech lending is negatively associated with Net Interest Margin and both risk-adjusted profitability measures. These findings demonstrate that conventional and risk-adjusted indicators provide distinct perspectives on bank performance. Bank managers should therefore strengthen operational efficiency, credit risk management, and liquidity management while developing appropriate strategies to respond to increasing competition from fintech lending.

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Submitted

2026-07-09

Accepted

2026-09-28

Published

2026-09-30

How to Cite

Kholidah, H., Evita Nur Haliza, Norzahidah Binti Yacob, Mochammad Nurul, Muhammad Raisa Haqqiquddin Rokhmatulloh, Hanifiyah Yuliatul Hijriah, & Hanif Fadhlillah. (2026). Efficiency, Risk, and Fintech as Indonesian Bank Profitability Drivers. Riset Akuntansi Dan Keuangan Indonesia, 11(2). https://doi.org/10.23917/reaksi.v11i2.18987

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Vol. 11 No. 2 (2026): Riset Akuntansi dan Keuangan Indonesia

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